Key Takeaways:
- OpenAI confidentially filed S-1 paperwork with the SEC on Monday.
- The ChatGPT maker was valued at $850 billion after its $122 billion March round.
- Altman told employees the company expects to go public within the next year.
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OpenAI files for IPO as Altman eyes $850 billion valuation
OpenAI filed confidential IPO paperwork Monday, setting the stage for an $850 billion listing as CEO Sam Altman told employees the company expects to go public within the next year.
"The confidential filing gives OpenAI the option to move quickly if it chooses, but the company has not yet decided on timing," said Kate Rooney, a reporter at CNBC. "A source at OpenAI said it could go as soon as September, although market conditions will be a big factor."
OpenAI was valued at roughly $850 billion after its $122 billion financing round in March, according to CNBC. The company spends $2.20 for every $1 earned, a burn rate driven by hundreds of billions of dollars in data-center spending, per PitchBook. Polymarket traders assign a 68.5 percent probability to an IPO by Dec. 31 but only a 31 percent chance of a September listing.
The filing lands during an unprecedented wave of mega-cap debuts. Rival Anthropic filed its own confidential IPO paperwork last week at a $965 billion valuation, and SpaceX is set to begin trading as early as June 12. Market intelligence firm PitchBook estimates the three companies will raise at least $180 billion combined, more than the total raised by all U.S. companies that listed in 2021. "The first to list sets the comp for the other two," said Harrison Rolfes, senior research analyst at PitchBook.
The Microsoft Proxy
Until OpenAI lists, Microsoft remains the most direct public-market proxy. The software giant holds an approximately 27 percent stake in OpenAI valued at around $135 billion, and OpenAI contracted to purchase an incremental $250 billion of Azure services, according to an SEC filing. Microsoft's own AI business reached an annual revenue run rate of $37 billion in the fiscal third quarter, up 123 percent year over year. Shares trade at $411.74, down 14.48 percent year to date, even as analysts carry a consensus price target of $560.95.
Why Staying Private Still Makes Sense
OpenAI itself flagged the case against listing. "Being a private company allows them to move a lot faster. You don't need quarterly earnings. You don't need all of the shareholder approval," Rooney said. The company also plans to let employees sell shares via a tender offer at the current valuation, relieving the internal liquidity pressure that often forces a company to go public. A business burning $2.20 per $1 of revenue may simply prefer to scale without the quarterly leash.
The Reallocation Risk
The sheer size of the offerings could create headwinds for existing tech stocks. "Pension funds, sovereign wealth funds, and large-cap growth mandates will need to fund IPO allocations by selling NVIDIA, Microsoft, Google, and Meta," Rolfes said. Nancy Tengler, CEO of Laffer Tengler Investments, said her firm is already selling some high-flying chip stocks to free up capital. Databricks CEO Ali Ghodsi told Bloomberg Television his company would not go public in 2026, calling it "a terrible year to go public" given the impending listings.
Perplexity CEO Aravind Srinivas told CNBC that "there will be ripple effects if they don't go well," adding that "their success means they'll be able to invest more into frontier model development."
This article is for informational purposes only and does not constitute investment advice.
[1] Report: Altman expects OpenAI to IPO within the next year[2] Sam Altman’s OpenAI Confidentially Files for IPO, Eyes $850+ Billion Valuation[3] What smart people are saying about OpenAI's IPO filing[4] The hard part is about to begin for the world’s biggest AI companies[5] OpenAI Could Be a Third Mega-IPO of 2026. Here's What's at Stake for Markets.
